OECD: Progress on harmful tax practices

Progress on the implementation of the international standard on harmful tax practices

Progress on the implementation of the international standard on harmful tax practices

The Organisation for Economic Cooperation and Development (OECD) today issued a release describing progress on the implementation of the international standard on harmful tax practices.

According to today’s OECD release, the OECD Forum on Harmful Tax Practices agreed to new conclusions [PDF 232 KB] on 12 regimes as part of the implementation of the BEPS Action 5 minimum standard on harmful tax practices.

  • Eswatini and Honduras made government commitments, and therefore, one regime from Eswatini and two regimes from Honduras are now in the process of being amended/eliminated.
  • Four regimes have been amended to be in line with the standard and are now not harmful (one regime from Costa Rica, one regime from Greece, and two regimes from Kazakhstan).
  • Italy abolished its patent box regime.
  • Three regimes were concluded as potentially harmful (two regimes from Armenia and one regime from Pakistan)—the Forum will assess at its next meeting if these regimes are actually harmful.
  • One regime from Cabo Verde is under review.

In addition, the release states that as part of the standard on substantial activities requirements in no or only nominal tax jurisdictions, the Forum undertakes an annual monitoring exercise to assess whether the standard operates effectively in practice. The Forum started this exercise in 2021 and now reveals the results of the first monitoring year [PDF 232 KB].

  • Recommendations for substantial improvement were made for four jurisdictions (Anguilla, the Bahamas, Barbados and the Turks and Caicos Islands).
  • Areas for focused monitoring were identified for another four jurisdictions (Bahrain, Bermuda, the British Virgin Islands and the Cayman Islands).
  • No issues were identified for Guernsey, Jersey, the Isle of Man and the United Arab Emirates.

The next annual monitoring will take place over the second half of this year. The Forum will then consider whether the overall compliance of jurisdictions is still satisfactory, particularly for those jurisdictions for which recommendations for substantial improvement were made.

 

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